Health Care Prosecutions Continue in New Administration

By: John A. Schwab 

Speculation is rampant concerning if and how the priorities of the U.S. Department of Justice will change under Attorney General Sessions. Looking at it from a different perspective, it is likely that certain priorities of the Obama administration will remain. Below I highlight a few recent cases involving healthcare prosecutions – an area that is likely to remain active over the next four years.

The investigation of these matters undoubtedly took place prior to the current administration. Nevertheless, the significant dollars spent on healthcare by private insurers and the federal government alike will require the DOJ to be focused on allegations of healthcare fraud in the future. A link to the DOJ press release follows each bullet.

  • On March 6, the operator of a Los Angeles rehabilitative clinic was sentenced to 63 months imprisonment for a $3.4 million Medicare fraud scheme. The defendant, Simon Hong, pled guilty based on the allegation that he billed for occupational therapy services that were not medically necessary and not provided. Instead, patients received acupuncture and massage therapy, which were not properly reimbursable by Medicare. At Hong’s direction, co-conspiring therapists inappropriately billed the “treatment” as legitimate occupational therapy.  LINK
  • In early-March, a federal jury convicted Rex Duruji for his role in a healthcare fraud and conspiracy totaling $1.3 million. During the four-day trial in Houston, Texas, the government presented evidence that Mr. Duruji posed as a physician to induce Medicare beneficiaries to sign up for home-health services that were not provided. There was also evidence admitted at trial that Medicare beneficiaries were paid kickbacks for those claims.  LINK
  • On March 1, two Florida residents pled guilty for their role in a $20 million healthcare fraud conspiracy that paid for referrals for patients to home-health care.  Mildrey Gonzalez and Milka Alfaro, co-owners and operators of seven health agencies in the Miami area, were alleged to have paid bribes and kickbacks to physicians and other health professionals for prescriptions for home-health services and for referral of Medicare patients to their home-health agencies.  LINK

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